Amendments to Affordable Housing Bill 2023 aim to save employers from paying Housing levy

National Assembly Majority Leader Kimani Ichungwah and Molo MP Kimani Kuria are keen on passing the Affordable Housing Bill 2023. 

[Elvis Ogina, Standard]

Employers will get a big relief if the National Assembly approves the proposal by a committee to scrap the requirement that they match the 1.5 per cent housing levy payable by their workers.

Initially, the National Treasury had proposed the levy be matched by employers but the National Assembly Committee on Finance and National Planning that was overseeing the public participation that concluded weeks ago, conceded to pleas that the levy on employers would render many jobless.

At the same time, National Assembly Majority Leader Kimani Ichungwah commended the courts for halting the housing levy arguing that the decision paved the way to enhance revenue collection.

"I want to extend my appreciation to the courts, we now have an opportunity to enhance revenue generation," he said

While giving submissions during the second reading of the Affordable Housing Bill 2023 in the National Assembly, on Thursday, Ichungwah said the amendments will save employers from paying the levy as the employees are doing so.

"There existed a lacuna in clause 4 of this Bill where companies of employers who had already deducted and remitted a matching amount of its employees were subjected to gain pay the levy," he said

In the report that was presented on the floor of the House Wednesday, the committee chaired by Molo MP Kimani Kuria retained the 1.5 per cent housing levy on employers basic pay but recommended for the deletion of employers having to pay the same.

Ichungwah who is the mover of the Bill further said Kenyans are willing to pay the levy and dismissed Azimio leaders for criticising the move, arguing that they also had the same idea in their manifesto.

"I was impressed to see patriotic Kenyans come out to say not only do they want to be beneficiaries of the programme but they want to be contributors of the fund," he said.

"Kenyans want to contribute to this fund because they understand its magnitude and importance, not because they want they want the houses but because they want millions of Kenyans to be employed," he added.

Azimio MPs however, said the opposition would not compel Kenyans to build houses and they would used alternative methods to source for funds for the affordable housing programme.

"’ Yes Azimio had the affordable housing in our manifesto but our implementation was totally different. Why introduce double taxation on Kenyans? Why are you compelling Kenyans to pay this money?" Posed Minority Leader, Opiyo Wandayi.

"The point of departure is the implementation. As Azimio we would have had Parliament appropriate money from Kenyan taxes by collecting taxes in the normal manner and appropriate part of the money collected to go and construct the houses. What they are doing is creating new taxes earmarked for the housing units," he added.

Wandayi wondered how Kenyans would benefit from their contribution.

"The moment it (the Bill) passes Mama Mboga must be prepared that Kenya Revenue Authority will be after them to collect the 1.5 per cent. How they will compute that is a miracle that we are waiting to see," he said

Echoing his sentiments Kathiani MP Robert Mbui wondered why the government is compelling Kenyans to pay the levy instead of channeling that energy elsewhere.

"Why are we fighting to build housing for a few individuals yet we have no schools for Grade 9. Kenyans are not looking for casual employment’s where do they go after Kenyans need permanent jobs," he said

The MPs further said that Kenyans are still waiting to know when they will get a refund of the January deduction following a court order that halted housing levy.

"What you need to tell us is when are we getting our money back? When are we getting our refunds of the monies that were deducted in January? I am shocked that in January my salary reflects the 1.5 per cent was deducted," Mbui said.

The report further recommends the formation of a board for accountability of the funds so that one channel can manage and allocate the funds to the categories of the houses that are institutional and affordable as Kenyans are worried about the utilization of the funds

The board is said to consist of a non-executive chairperson, principal secretaries of the National Treasury and State Department related to affordable housing, three persons appointed by the Cabinet Secretary of whom one should be from the Council of Governors, Central Organisation of Trade Unions and another from the Federation of Kenya Employers

The committee also recommends that Parliament adapts the Affordable Housing Bill with amendments that will see every Kenyan comply through tax procedures of 2015 so as to deal with the discriminatory aspect as ruled by the courts.

"In this new law, we have now made it possible for even non-salaried people to be able to contribute. Everyone will pay their fair share," Ichungwah said

Mombasa MP Zamzam Mohammed said it was time for the Kenya Kwanza lawmakers to tell President William Ruto the truth and forget the housing levy.

"Tell the president the truth. The courts have refused this thing. Kenyans have refused this thing. Already the VAT is up what else do you want? Use what you get to fund what you want stop overtaxing Kenyans," she said

The committee also recommends the deletion of the 10 per cent deposit of the total amount that was initially required for one to secure a unit.

The report states, "The committee recommends deleting the 10 per cent recommending that the deposit amount be described in the regulations," reads the report.

For consensus, the Bill must undergo the Senate for scrutiny before it is either adapted to become a law or rejected.